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Skeena Acquires Gold Project in Toodoggone

Skeena Resources Ltd. has acquired a high-grade gold occurrence covered by the historic Mets mining lease in the Toodoggone precious metals district in north-central British Columbia. This area was one of the more actively explored in B.C. during the 1980s and 1990s, firstly for near-surface, epithermal-style, high-grade gold and silver, and later for porphyry-style copper-gold deposits.

The single-most significant development in the area is the 55,000-ton-per-day Kemess porphyry copper-gold mine, 40 miles to the south of Mets. Other past producers in the area include the Lawyers mine, located 10 miles to the south, which produced 174,000 ounces of gold and 3.6 million ounces of silver, and the Baker and Shasta mines, located 14 miles south, which also saw intermittent production between 1980 and 1996. At Baker (now owned and seasonally operated by Sable Resources), approximately 81,878 tonnes were mined at an average grade of 15.68 grams per tonne gold and 291 g/t silver, while at Shasta, 113,113 tonnes were mined at an average grade of 5.33 g/t Au and 292 g/t Ag.

At the Mets property, the main area of interest consists of a tabular core of silicified rock and quartz-barite veining in three separate but genetically related zones: the A zone (and its extension), the footwall zone and the 400 South zone. Exploratory work between the mid-1980s and 1992 consisted of various geological and geochemical surveys, excavator trenching, 8,784 metres of diamond drilling, and 350 metres of underground development on one level. On this basis, two previous operators calculated a gold resource. These historic tonnages are quoted here for context only, as the calculations are not compliant with current Canadian Securities 43-101 reporting guidelines and will require both verification and updating. The A zone has a strike length of 140 metres, a true thickness of six to 10 metres and vertical extent of up to 75 metres. Measured geological resource for the A zone is 143,321 tonnes grading 11.31 grams per tonne gold (assessment report 16692, source B.C. Minfile). Inferred resource for the less tested combined footwall and N75 zones are 317,485 tonnes grading 11.31 g/t Au (source B.C. Minfile, property file — MEG Talk, Nov. 18, 1987).

In 1992, Cheni Gold Mines Inc. optioned the Mets property, completed an in-house feasibility study, permitted the project and undertook a brief underground program. Its last recalculation of the A zone resource was a “diluted mine reserve” of 53,215 tonnes grading 11.6 grams per tonne gold. Development material from this deposit was to have been trucked over two field seasons to the nearby Lawyers mill. The program was abandoned when the French owners of Cheni prematurely shut down their Canadian gold operations. In 1993, the stockpiled development rock was placed back underground, the adit was sealed and the site reclaimed.

At least five other areas of alteration, quartz veining and mineralization occur elsewhere on the Mets property with previous trench results up to 12 g/t Au over two metres. None of these targets have yet been drill tested. The interpreted fault offset of the A zone presents another priority target where a single diamond drill hole yielded 22.834 g/t Au over a core length of 7.1 metres.

The property acquisition also includes the nearby Belle claims which host two significant, undrilled occurrences. Previous work at the Belle South prospect has identified an argillic alteration zone 200 metres long by two metres wide where grab samples yielded up to 107 grams per tonne gold and 30 to 103 g/t silver. The Belle North prospect consists of a poorly exposed quartz-barite vein structure with a surface trace of greater than 450 metres and a width of 0.75 to 1.8 m. Grab samples of float were reported to assay up to 1,960 parts per billion Au and 12,400 ppb Ag.

The purchase agreement, with two non-arm’s-length directors of the company, provides for Skeena to acquire a 100-per-cent interest in the two properties for one million shares and the reservation of a 2-per-cent net smelter return (NSR) royalty interest. The NSR interest is purchasable at any time for $500,000. The agreement, which is subject to regulatory approval, was reviewed by an independent committee of the company.

The company will undertake a program of environmental assessment and re-engineering this season in order to again permit the property under the small mine section of the British Columbia Mining Act (health, safety and reclamation code).

The qualified person responsible for review of the technical data in this news release is J.R. Allan, PGeol, the company’s president and chief executive officer.

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